SBA Loan Solutions

Considering the voluminous number of start-up businesses that don’t make it in this country, the facts and figures have historically been alarming to lenders.  Therefore, many checks, balances and hurdles are required when someone attempts to secure a capital advance even from the federally run U.S. Small Business Administration (SBA).  One such requisite demand of lenders is life insurance to indemnify the premature death of a borrower during a loan term.  SBA lenders typically won’t close on corporate loans without collateralized backing in the form of term insurance at amounts often mirroring entire loan balances.

Simple term insurance is often assigned to address lenders’ loan requirements, but more and more, agents and advisors are finding traditional term life coverage is not as readily available to prospective borrowers as it might have previously been or is not the right fit at the right time.  Personal health issues like cardiovascular disease, obesity, diabetes and cancer histories as well as additional impaired risks like drug and alcohol concerns and criminal histories frequently leave potential borrowers uninsurable and unable to secure the loans they need for business growth or entrepreneurship.

Another common roadblock is timing.  Lenders usually place tight timelines on the application, approval and funding processes involving corporate loans, and often, borrowers struggle and sometimes fail to secure proper levels of insurance in time.

Fortunately, Petersen International has solutions to address these concerns.  The Business Loan Failure to Survive (FTS) plan is a simplified-issue term product that provides a death benefit that is collaterally assigned to a lending institution for the explicit purpose of covering a business loan.  The product requires no exams or labs, just an application that can be underwritten, issued and assigned in a matter of days, not weeks or months. 

We are also excited to share that Petersen has just launched an electronic application platform for this program which will additionally increase underwriting efficiency and the speed of policy issuance to further assist your clientele.

It is the perfect tool to meet the tight closing schedules of most lenders.  The FTS coverage can also be taken out by clients who are currently in underwriting for traditional policies but are needing immediate coverage to close on their loan.  They may purchase and then cancel the FTS coverage at their discretion once their approval comes in on the longer-termed product.

Furthermore, the loan FTS plan employs a more liberal underwriting methodology than that of most carriers.  By use of health exclusions and/or ratings, we are able to accept impaired risks that are typically declined or postponed by other insurance companies.

In addition to providing death benefits to clients in need of securing business loans, our disability insurance department also has significant solutions that complement the Failure to Survive program.  Please contact us at (800)345-8816 with questions about insurances for SBA and other business loan requirements.